'The two simply don't line up': Polestar calls for Fringe Benefits Tax exemption on electric cars to remain despite cost blowouts and continued EV sales growth and calls for tax breaks on utes such as the Ford Ranger, Toyota HiLux to be axed first

The Australian federal government is looking to potentially scrap or alter its electric vehicle (EV) tax relief but Polestar Australia has said this could prematurely stunt sales growth.

Since July 2022, novated lease buyers of an EVs and previously plug-in hybrids (PHEV) under the Luxury Car Tax (LCT) threshold for fuel-efficient vehicles have been exempt from Fringe Benefits Tax (FBT).

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As EV sales continue to gain traction in Australia, Polestar Australia Managing Director Scott Maynard said the government shouldn’t change things now.

“This is not the time to change the settings that they've got on the FBT relief for electric vehicles,” said Maynard.

“So the government's published goal is to see 50 per cent of the market buying electric vehicles by 2035. They're nowhere near that, and they're not tracking towards that.

“So I fail to see how the program could be overspent when the results are underdone. The two simply don't line up.

“It would suggest that the problem here is that it was under budgeted from the start.

“It's great to see the electric vehicle share of the light vehicle market has now risen above 10 per cent for the year and continues to increase.

“That's great, but at the first sign of success, I don't think that that would be the time to dismantle or even change the program.”

As it currently stands, versions of the Polestar 2 and Polestar 4 are below the LCT threshold and can be exempt from FBT if you get a novated lease.

Sales of Polestar cars also went up 38.5 per cent year-on-year during 2025, likely due in part to how the FBT exemption has helped spur growing EV sales.

“If the government is seeking to rationalise its expense through FBT subsidies, I feel strongly that it should be looking at the money it's investing in the sale of dual-cab utes before it looks at electric vehicles,” added Maynard.

“We all accept that electric vehicles present Australian drivers now with sufficient choice, a lower running cost, and vehicles that are fun to drive and easy to own, and we all accept that there's tangible and measurable health benefits to to the cleaner air that they that they will provide us, and yet we don't think twice about the billions of dollars is that the government is sinking into the sale of dual-cab ute to the point where now, where we're selling one and a half times the utes that we have tradespeople.

“We're selling these things with an FBT subsidy of prices in excess of $200,000. That would seem to me to be a much easier win than going after a corner of the market that's doing good things and not enough of them.”

Currently vehicles like a single- or dual-cab ute, van, hearse and taxi, among a few others are exempt from FBT provided they are for business purposes and have limited private use.

It’s worth noting that utes are still among the best-selling vehicles in Australia and many are diesel-powered.

These types of vehicles also have a more lenient CO2 target to hit as part of the government’s New Vehicle Efficiency Standard (NVES), though this will still get harder for carmakers to achieve as the years go on and the target is reduced.